The purpose of our studies is to elucidate the cellular and biochemical events during the early post-initiation stages of neoplastic transformation. Following carcinogen exposure clonal density tracheal epithelial (RTE) cell cultures revealed 4 different colony types (types I-IV). Only type III + IV were considered to be transformed as judged by colony size, cell density, labeling index and cell size. Even the most advanced transformed colonies had growth fractions of only 30%, and only about 15% of the cells had colony-forming ability; 40% of the cells showed signs of advanced keratinocyte differentiation. Apparently most of the clonal offspring produced by transformed stem cells has limited replicative potential. Other studies showed that retinoic acid (RA) irreversibly inhibits transformation of RTE cells at concentrations of 10 minus 8 M, even when present in the medium for only 1 week. RTE cell transformants are most sensitive to RA during the first 2 weeks of the post-initiation period and become increasingly resistant with the passage of time. Studies with tumor promoters showed that normal RTE cells are triggered into cell cycle by tumor promoters, that TPA does not enhance transformation frequency and that it is toxic for preneoplastic RTE cells at concentrations of 1 ng/ml. Surviving cells escaping TPA toxicity are temporarily TPA resistant. Studies to determine the role of oncogenes in neoplastic transformation of RTE cells have shown that the cellular oncogenes myc, H-ras, K-ras, fos, fms, and raf are expressed in several neoplastic RTE cells lines. The level of oncogene expression at preneoplastic stages is being determined.